Czech Republic: “One-stop-shop” (OSS) for VAT on remote sales, options for platforms
Czech Republic: “One-stop-shop” (OSS) for VAT
Proposed value added tax (VAT) changes—scheduled to be effective 1 July 2021—would introduce the “deemed supplier” concept for electronic interface operators (platforms).
The deemed supplier concept would be applied when a platform facilitates certain distance (remote) sales of goods or distance sales of imported goods. To settle the appropriate VAT, platforms would be able to use various mechanisms, one of which is the EU’s one-stop-shop (OSS).
A platform that meets the characteristics of a deemed supplier (read TaxNewsFlash) must resolve how it would settle the appropriate VAT. When the facilitation of sales of goods of a foreign supplier established in the EU is concerned, there are in general two options:
- The platform may register for VAT in all EU countries to which goods are dispatched.
- The platform may register for the “union scheme” (the OSS) that offers a new and simpler alternative method. Registration for the OSS is voluntary.
An EU platform may register for the OSS (the union scheme) in its home country (state of identification). All VAT collected on selected supplies must then be declared through tax returns filed via a portal of the platform’s home country. The total tax amount is paid in euros to the account of the financial administration in the home country, which then distributes the tax amounts to appropriate EU Member States.
Under the OSS regime:
- VAT returns are filed for calendar quarters, by the end of the following calendar month.
- The tax is to be expressed in euros using the rate of exchange for the last day of the tax period, and payable within the deadline for filing a VAT return.
- The tax base is to be stated only in a standard VAT return, whereas only the tax amount is declared under the OSS.
- If the taxpayer does not perform any selected supplies during the tax period, the taxpayer must file a zero VAT return.
- Any corrections must be made within three years via a tax return for the period of the correction, and a special correction module is used for this purpose.
The OSS regime represents a significant simplification for platforms (and certain other suppliers) that would otherwise have to deal with substantial administrative expenses for numerous VAT registrations in various jurisdictions.
Read an April 2021 report prepared by the KPMG member firm in the Czech Republic
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